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Billionaire Mavericks owner Mark Cuban opens online pharmacy offering prescription drugs

·3 min read

Billionaire and Mavericks owners Mark Cuban has opened up an online pharmacy offering prescription drugs at cheaper prices.

Their strategy behind offering lower prices to consumers is to "bypass middlemen and outrageous markups," according to a press release by the Mark Cuban Cost Plus Drug Company.

In its press release, the company pointed out medications on its site that offer significant savings. For example, Imatinib, a drug used to treat leukemia has a retail price of $9,657 per month and a price of $120 per month with a voucher, whereas MCCPDC offers it for $47 per month, according to the press release.

Other drugs with savings include Mesalamine, an ulcerative colitis treatment, and Colchicine, a gout treatment, according to MCCPDC.

The company's goal is to bring transparency to the drug pricing market and show consumers the wholesale price behind a drug.

More specifically, MCCPDC eliminates the fee paid to pharmacists, pharmacies and pharmacy benefit managers that negotiate contracts with different stakeholders in the healthcare arena.

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Pharmacy benefit managers in particular have come under scrutiny for their role in the distribution of prescription drugs, according to The Commonwealth Fund, a private foundation dedicated to healthcare research and policy. Pharmacy benefit managers are companies that stand in the middle of pharmacies, drug manufacturers and health insurers.

First, they use their wholesale power to negotiate rebates with drug manufacturers. Second, they pass those rebates onto and receive payment from health insurers. Third, they pay pharmacies to dispense the prescription drugs to patients.

However, little transparency exists for how much of those rebates pharmacy benefit managers pass on, and rebate incentives may cause those managers to favor expensive drugs rather than cheaper and more generic ones, potentially passing on high costs to the consumer, according to The Commonwealth Fund.

"There are numerous bad actors in the pharmaceutical supply chain preventing patients from getting affordable medicines," Alex Oshmyansky, CEO of MCCPD said in a press release. "The only way to ensure affordable prices get through is to vertically integrate."

However, without the pharmacy benefit managers, all purchases on the site have to be made with cash and cannot be paid for with insurance. MCCPDC points out that even without insurance, its prices are still cheaper than many deductibles and copays.

Whether or not prices will be cheaper will heavily depend on the specific drug, according to Joseph Antos, Wilson H. Taylor scholar in health care and retirement policy at the American Enterprise Institute.

"There's nothing uniform about his market," Antos says."It's very hard to predict ... whether the reduced out-of-pocket cost is enough."

Antos points out that Cuban is not the first to enter the market and that it's a highly competitive one with contenders like GoodRx and pharmacies that have existing relationships with patients.

Whether Cuban's company will succeed will depend on how effective it is at reaching patients and whether they would be willing to switch from an incumbent provider, Antos says.

Michelle Shen is a Money & Tech Digital Reporter for USA TODAY. You can reach her @michelle_shen10 on Twitter.

This article originally appeared on USA TODAY: Mark Cuban opens online pharmacy promising cheaper prescription drugs